7 September 2007
The South African subsidiary of Kuwait-based IFA Hotels & Resorts (IFAHR) is further expanding its presence in the local hospitality sector, announcing this week that it has increased its stake in the Boschendal wine estate in Franschoek to 26.5%.
Since IFAHR listed its 85%-owned subsidiary on the JSE in February 2006, the company has been busy investing in the development of premier leisure hotels and mixed-use resorts around the country.
The Kuwaiti parent company has a market capitalisation of over US$1-biliion, while its South African subsidiary is worth over R1-billion.
Announcing its maiden results in August 2006 following the listing, IFA SA stated that revenue had increased by 57% to $22.7-million (approximately R163.3-million) while profit after tax leapt by 209% to $5.9-million (approximately R42.4-million).
“The strong performance of our assets has laid a solid foundation for growth,” IFA SA chief executive Talal Jassim Al-Bahar said at the time. “We expect this to be boosted by South Africa’s increasing popularity as a tourist destination and a hunting ground for international property investors.”
The company made its entrance into the South African tourism market by acquiring the Zimbali Lodge on KwaZulu-Natal’s north coast, as well as a 50% stake in the Zimbali Coastal Resort, in 2003.
Such has been its success with Zimbali that the company launched the Fairmont Zimbali in December 2006. The R1.8-billion development features a five-star hotel, a Gary Player signature golf course as well as freestanding villas for residential or investment purposes.
Investors were offered a variety of ownership opportunities in the development, ranging from direct investment in a typical hotel condominium suite to the purchasing of an apartment or freestanding villas.
The hotel suites will also be rented out, providing the owner with a return on investment as well as use of the property for a specified time each year. Investors who purchase an apartment of villa have the added advantage of having their properties serviced and maintained to the highest standards.
The apartments and villas can also be included in a rental scheme, a concept that is very successful within Zimbali.
“This exciting launch enables us to introduce a diverse portfolio of upmarket residential and leisure investment opportunities to the local and international market,” IFA Estates sales director Vaughn Reiche said.
“The introduction of the Fairmont brand into Zimbali aligns us with an iconic world class operator, elevating Zimbali’s profile in the international luxury mixed-use resort market.”
IFA SA also launched a fractional ownership property development in July this year, called the Fairmont Heritage Place, located within the Zimbali Coastal Resort, which it jointly owns with Moreland Development.
Fractional owners are entitled to 14 days’ use of their own home and a further seven days’ use either within their own home or in a similar one each year.
In addition, two of the three guaranteed weeks may be exchanged for time at another Fairmont Heritage Place community, while one week may be exchanged in order to stay at any one of Fairmont Hotels & Resorts’ properties worldwide.
In its first acquisition since listing on the JSE, IFA SA bought a 19.25% stake in the Boschendal Estate outside Franschoek in the Western Cape for approximately $10-million in June 2006.
Commenting on the transaction at the time, Al-Bahar said the acquisition positioned IFA SA as an integral contributor to the mixed-use development on the 2 400-hectare estate.
In addition, the purchase was in line with IFA SA’s strategy to deliver new premier resort and residential developments in South Africa, while also diversifying away from KwaZulu-Natal.
“The intention is to use IFA SA as a platform for continued investment in Africa to expand the group’s global network of resorts, ensuring that we continue to deliver prime opportunities in tourism and real estate to our global investors,” IFAHR president Werner Burger said.
Development plans for the Boschendal Estate, estimated at R2-billion, include an upmarket retirement village with 500 individual houses, a boutique hotel with upwards of 120 rooms, and a mixed-use development of a shopping centre, offices and apartments.
In September 2007, IFA SA announced that it would purchase a further 7.3% in the estate, taking its total shareholding up to 26.5%. No details were given, however, on who the stake was purchased from or for how much.
Toward the end of August 2007, IFA SA announced its entry into the South African wildlife hospitality market, by buying a 50% stake in a joint venture company that is to acquire Legend Golf & Safari Resort development.
The Legend development, expected to cost approximately $411-million, forms part of the 22 000-hectare Big Five Entabeni Safari Conservancy that is located in the Limpopo province’s Waterberg range, a three-hour drive from the economic hub of Johannesburg.
The residential estate features an 18-hole golf course, with each hole endorsed by the signature of one of the world’s top professional golfers, a world first. In addition, a state-of-the-art golf academy with a driving range will offer avid golfers various training programmes.
In addition, the estate will include an internationally branded five-star hotel with a health spa and a wellness centre, as well as conference and recreational facilities for up to 2 500 delegates.
Lying in the shadow of the Hanglip Mountain, the resort’s design and layout minimise impact on surrounding natural resources, preserving the bush environment, while enhancing privacy and tranquillity.
As part of its commitment to social responsibility, the Legend Foundation will be established, enabling the local community to used the resort’s Fields of Legends complex for sports such as football, rugby, cricket, netball and hockey.
“This acquisition is a continuation of our intention to invest in South Africa and Africa, a focus area of our set global expansion strategy,” Al-Bahar said. “Legend Golf & Safari Resort is one of a kind, and it will be a great destination for South African and international investors and tourists.
“It is our aim to provide our clients with both superb and varied investment and recreational opportunities; this experience perfectly complements the Zimbali Coastal Resort and our other developments.”